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Press ReleasesWestland Milk Products breaks even for 2016-17

Westland Milk Products has recovered from a loss in the 12 months ended July 31, 2016, to post a break-even profit before tax for the 2016-17 financial year.

The company, New Zealand’s second largest dairy co-operative, said the result represented a total payout to its 342 shareholders of $338.7million, a net average cash payout of $5.18/kgms.

Chairman Pete Morrison said the payout is effectively a break-even result for the Westland Group at $29,000 profit before tax.

“While this is an improved result on 2015-16 when our payout was $3.88/kgms, it is still not industry competitive,” Morrison said. “Shareholders expect their Board and management to do much better this current financial year.

“Both board and management warned shareholders after our annual general meeting last year that we would not be able to return the company to an industry competitive payout in one season. We committed to doing so for 2017-18.

“Our new ways of working and accountability from board, management and staff will make a huge difference this year and I am pleased to confirm that our payout prediction for this season is in the $6.40 to $6.80 range.

“This recovery bodes well for the future of our co-operative. When our new Chief Executive Toni Brendish commenced in September 2016, and quickly established a new finance team to work with her, she identified that it was costing Westland more to process its ‘bucket of milk’ compared with other dairy companies in New Zealand. Since then, management has embarked on a campaign to reduce costs and improve efficiencies. The result has been the removal of many millions of dollars in costs from the business.”

Ends

EDITORS PLEASE NOTE:

1. With Westland’s full annual report not due for publication until early November, a summary of Westland’s financial results is attached to this email.

2. In 2015-2016 Westland reported a $14.5m after tax loss. An adjustment to deferred tax for that year reduced the previously reported loss to $10.3m. Opening retained earnings for the 2015-2016 year were also adjusted, resulting in a net improvement of $1.5m to previously reported retained earnings for the Group, with no change to 2015-2016 operating results, payout or cashflow. Details of the restatement will appear in the full annual report.